Glass House Brands Inc. (OTCQX:GLASF) (OTCQX:GHBWF) (NEO:GLAS.A.U) (NEO:GLAS.WT.U) obtained all local regulatory approvals for the acquisition of the Natural Healing Center ("NHC") dispensaries located in Grover Beach and Lemoore, California, and the transactions have officially closed. Consolidation of the financial results of the Grover Beach and Lemoore stores into Glass House Brands financials will begin effective immediately.
On May 12, 2022, Glass House announced that it had executed definitive agreements to acquire 100% of the equity interests in three Natural Healing Center retail assets: two operating retail dispensaries and one retail dispensary scheduled to open in Q4 2022. This was followed by the announcement in the company’s Q2 earnings release on August 11, 2022 that Glass House had agreed to acquire Natural Healing Center's flagship Grover Beach operating dispensary for $15.9 million, with $8.1 million of the purchase price in assumed debt, $7.7 million in stock and $100,000 in cash net of working capital.
"It is with great pleasure and enthusiasm that I welcome the incredibly talented and hard-working staff at NHC Grover Beach and Lemoore into the Glass House Brands family" stated Kyle Kazan. "The Grover Beach and Lemoore dispensaries are the first two NHC dispensaries to be officially onboarded, and we expect to close the acquisition of the Morro Bay store in Q3 or Q4 2022, while Turlock is expected to close in Q4 2022 upon the store's opening. As we stated when announcing the execution of definitive agreements for the NHC transaction, this acquisition will advance us further in our goal of becoming one of the largest retailers in the State of California, adds further support to our recently acquired PLUS edibles business and provides incremental outlets for CPG sales as the SoCal farm continues to expand its output.”
“Given NHC's positioning in limited license markets and its strong consumer following, we are excited to be adding these 4 dispensaries to our retail portfolio. We are now poised to execute a dramatic transformation in the size of our retail dispensary business. Glass House has the potential to reach an annual revenue run rate in excess of 200 million within the next 12 months, versus the company's 2021 revenue of $69 million. The NHC transaction is expected to be immediately accretive to Glass House on both a revenue and EBITDA basis, with all of NHC's open locations currently generating EBITDA margins in excess of 20%," continued Kazan.
Photo by Esteban Lopez on Unsplash
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